We have previously described a protocol that allows us to efficiently and reproducibly convert human iPSCs into cells that share most of the characteristics of hepatocytes. We have published our success in using patient specific iPSCs to model infectious liver disease, inborn errors of hepatic metabolism, and early cell fate decisions. The procedure uses wholly defined conditions and as a consequence results in a synchronous differentiation that appears to closely mirror the known development events that occur during normal hepatocyte formation. In the submitted proposal we propose to use this human model to uncover the molecular mechanisms through which hepatic progenitor cells are generated from definitive endoderm. Specification of the hepatic progenitors has historically been recalcitrant to molecular analysis because the process is dynamic and hepatic progenitor cells are a transient population that are difficult to access in quantity in model organisms. Because the formation of the hepatic progenitors from iPSCs is synchronous and reproducible it affords access to a cell population that is amenable to genetic manipulation and molecular and biochemical analyses. We propose to exploit this to define the molecular events that link signaling molecules that act on the endoderm to the action of transcription factors that define the generation of hepatic progenitor cells. We believe that success in the proposal will significantly advance our understanding of the fundamental molecular basis of hepatocyte formation and help realize the full potential of stem cells in the study and treatment of liver disease.